Gold tops $1,600, rises to record

Gold rose to a record $1,607.90 an ounce as debt concerns in Europe and the U.S. boosted demand for the metal as a haven.

"There's just a lack of confidence in government and currency," said Frank Lesh, a trader at FuturePath Trading in Chicago. "There's a flight to safety into gold. When Europe fixes their house and the U.S. fixes our house, maybe then there'll be in a correction in gold."

Gold futures for August delivery rose $12.30, or 0.8%, to settle at $1,602.40 on the Comex in New York. The metal was up for the 10th straight session, the longest rally since January 1980, when the price climbed to $873, a record at the time.

UBS said in a report that its Zurich sales desk on July 15 had the biggest gold-coin demand in a year. The metal denominated in euros and pounds jumped to records after European Central Bank President Jean-Claude Trichet reiterated his opposition to any restructuring of Greek debt.

"Europeans primarily are fearful about the future of their currency and are exiting positions there for Swiss francs and gold," said Dennis Gartman, an economist. "Were we a German lawyer, or doctor, or small business owners, we'd be buying gold."

Gold has doubled since early December 2008 as the Federal Reserve kept interest rates at a record low and governments spent trillions of dollars to prop up the economy after the most-severe global recession since World War II.

The Treasury Department has warned the U.S. debt ceiling must be lifted by Aug. 2 to avoid default. Standard & Poor's and Moody's Investors Service may downgrade the government's credit rating if Congress doesn't act.

Silver futures for September delivery rose $1.271, or 3.3%, to $40.342 an ounce, the highest settlement since May 3. The price jumped 9.6% in the previous three sessions. On April 25, the price reached $49.845, a 31-year high.

Palladium futures for September delivery rose $13.95, or 1.8%, to $794.60 an ounce on the New York Mercantile Exchange. Platinum futures for October delivery rose $19.90, or 1.1%, to $1,775.40 an ounce.